BR:Gold hits 1-month low, eyes longest downturn since 2009
SINGAPORE: Gold dropped to its weakest level in almost a month on Thursday, hurt by a firmer dollar and as holdings in exchange-traded funds fell to the lowest in over four years, potentially stretching bullion's losing streak to a sixth day.
If gold ends lower on the day, it would be its longest losing streak since March 2009. The drops have already helped to fuel another scramble for bullion that has push Asian premiums for physical gold to record highs.
Spot gold fell to as low as $1,374.99 an ounce, its cheapest since April 18. By 0748 GMT, it was down 1 percent at $1,378.36.
Gold is less than $60 away from two-year lows hit in mid-April. Prices have fallen nearly 18 percent this year and are well below a record top near $1,920 struck in September 2011.
"The recent stronger profile of the US dollar has undermined some of the financial investments side of buying gold," said Tim Riddell, head of ANZ Global Markets Research, Asia. A stronger greenback makes dollar-denominated commodities more expensive for holders of other currencies.
Financial markets are also rife with speculation that the US Federal Reserve may begin winding down its aggressive economic stimulus, undermining the argument for holding gold as a hedge against potential inflation.
Buying in China, the world's No. 2 consumer after India, has helped limit price losses.
China bought a large amount of gold on Thursday morning after prices fell by more than $20 overnight, said Peter Tse, director at ScotiaMocatta in Hong Kong.
